HRM.
Chapter 5-HR Demand

Chapter 5-HR Demand - Chapter 5 Determining HR Demand...

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Chapter 5: Determining HR Demand Methods of Forecasting HR demand: future needs for the firm’s skill requirements, types of jobs, and number of positions that must be filled for the firm to implement. Demand is determined by the strategic and operational requirements of the firm or business unit Quantitative Method A. Trend Analysis: forecasting method that extrapolates from historical organizational indices Ex. Single indices include sales, sales per employee, etc. Ratio Analysis: analyzing the relationship between an operational index and the number of employees required Commonly used by many organizations Sales level is the most common index used by organizations Other indices include: the number of units produced, the number of clients serviced, and the production hours Some organizations use trend analysis to ascertain demand requirements for direct and indirect labour 5 Steps to conducting an effective trend analysis: Select the appropriate business/operational index Ex. Sales level Operational index must be known to have a direct influence on the organizational demand for labour and is subjected to future forecasting as a result of the normal business planning process Track the operational index over time It is necessary to go back in time for at least the four or five most recent year to record the quantitative or numerical levels of the index over time Track the workforce size over time Ex. Total number of employees or amount of direct and indirect labour Calculate the average ration of the operational index to the workforce size Employee requirement ratio: divide the level of sales for each year of historical data by the number of employees required to product that year’s level of sales Calculate the forecasted demand for labour
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Divide the annual forecast for the operational index by the average employee requirement ratio for each future year in order to arrive at forecasted annual demand for labour Ex. Obtain future sales forecast figures for the next 5 years, divide the lvl of sales by the avg employee requirement ratio to obtain the forecasted numerical demand for labour for each future year B. Time Series Model Use past data to predict future demand Weighted moving average: places more importance on recent demand data To capture seasonality or trends in demand, exponential smoothing is used Exponential smoothing also uses all past demand data, and places priority on recent demand data (even more than weighted moving avg) Usually incorporates only the relationship between a single business variable and demand for labour (workforce size) Multivariate regression or other similar modeling/programming models used to analyze more comprehensive analysis such as level of UE.
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  • Winter '13
  • MelanieChaparian
  • Forecasting, operational index, employee requirement ratio

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